Venture Capital

Venture Capital Basics

What It Is: Institutional venture capital comes from professionally managed funds that have $25 million to more than $1 billion to invest in emerging growth companies. Venture capital focuses on capital investments in private, young, fast-growing companies.

Appropriate for: High-growth, high-potential companies that are capable of becoming market leaders, and being profitable in five to eight years.

Best Use: Varied. From financing product development and commercializing promising technologies to building durable well-run businesses.

Cost: Expensive. Institutional venture capitalists purchase significant equity in a business. The earlier the investment stage, the more equity is required to persuade an institutional venture capitalist to invest. The range of funds typically available is $500,000 to more than $30 million.

Ease of Acquisition: Difficult. Institutional venture capitalists are choosy. Institutional venture capital is an appropriate source of funding for only a limited number of companies.

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Today's Most Read

News and Articles About Venture Capital

Consider Control and Voting Rights When Making Venture Capital Deals
Venture Capital

Consider Control and Voting Rights When Making Venture Capital Deals

Investors want to protect their stake, entrepreneurs want to keep control. There is room to negotiate.
Bo Yaghmaie
On-Demand Grocery Startup Instacart Raises $44 Million From Big-Name Investors
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On-Demand Grocery Startup Instacart Raises $44 Million From Big-Name Investors

A cross between Peapod and Uber, Instacart allows customers to select items online from their favorite grocery stores and have them picked up and delivered by locals.
Laura Entis
Airbnb Co-Founder: If Rejection Slows You Down, Entrepreneurship Isn't For You
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Airbnb Co-Founder: If Rejection Slows You Down, Entrepreneurship Isn't For You

The apartment-rental platform is no stranger to controversy and criticism, but its founders say determination is everything.
Catherine Clifford
Secure That First Investor, and the Rest Will Come
Venture Capital

Secure That First Investor, and the Rest Will Come

Venture capital's dirty little secret: investors don't like going it alone.
Uber Breaks a Record With Its Latest Funding Round
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Uber Breaks a Record With Its Latest Funding Round

With $1.2 billion from Fidelity and others, Uber sets the bar for other private companies in VC funding.
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Jared Leto Is the Latest Celeb to Hop on the Entrepreneurial Bandwagon
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Jared Leto Is the Latest Celeb to Hop on the Entrepreneurial Bandwagon

The Academy Award-winning actor and musician has invested in tech startup Zenefits, an automated human resources company.
Geoff Weiss
Blockchain.info CEO: We Pay Employees in Bitcoin. And Someday You Might, Too.
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Blockchain.info CEO: We Pay Employees in Bitcoin. And Someday You Might, Too.

We talked to the charismatic Blockchain.info CEO about Bitcoin's recent rocky press, its price ups and downs, and if we're headed for another bubble.
Kim Lachance Shandrow
Raising Money for Your Business? Consider These Tips.
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Raising Money for Your Business? Consider These Tips.

Being savvy about your time and money can maximize your resources as you bootstrap your business.
Linda Lacina
The Top 10 VC Deals of 2013
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The Top 10 VC Deals of 2013

The software sector continues to dominate the venture market, but it's important to pinpoint the outliers of 2013.
Tanya Benedicto Klich
VC 100: The Top Venture Capital Firms Backing U.S. Startups
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VC 100: The Top Venture Capital Firms Backing U.S. Startups

If you want to launch a business, it's critical to know the state of startup capital. As the VC market recovers, we look at the firms funding American innovation.
Tanya Benedicto Klich
How a Biomed Tech Company Raised $35.7 Million Before Going to Market
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How a Biomed Tech Company Raised $35.7 Million Before Going to Market

CardioInsight found a way to 3D map the heart's electrical activity, but it took a village of funding resources to get there.
Jane Porter
A Foolproof Guide to Raising Capital for Startups
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A Foolproof Guide to Raising Capital for Startups

Pass these nine tests and investors will beat a path to your door. Along the way you'll figure out if your firm has a great CEO.
Peter S. Cohan
10 Reasons Why You Shouldn't Join a Startup
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10 Reasons Why You Shouldn't Join a Startup

Beyond the glitz and hype, a new businesses may present a certain gritty reality. Steer clear if you're not prepared.
John Rampton